Texas Power Companies Leverage Climate Heatwaves To Charge Upwards Of $5000 For Electricity
The four horsemen of the Texan apocalypse bring heatwaves, droughts, wildfires, and sea level rise, but the fifth might be bankruptcy. Wednesday, September 6th, during a brutal heatwave Texas power prices soared 20,000% costing residents $5000 per mega-watt hour. This is a near life changing disaster for lower-middle income Texans who cannot turn off their air conditioning due to the raging heat wave and overbearing outdoor temperatures. A bill of $5000 or more can easily wipe out the savings of the almost 80% of Americans living paycheck to paycheck. The spike in price was in response to temperatures over 100 degrees in Houston, Dallas, San Antonio, and other major cities.
Why are Texans being uniquely financially gutted by these heat surges? The reason, like most regarding the climate, is due to the greed of oil and natural gas companies. Natural gas provides Texas with 44% of its power which is 7% higher than the national proportion. This is likely due to oil and gas making up 9% of Texas' economy and accounting for 42% of the nations crude oil. Texas also maintains a power grid that is disconnected from the rest of the country, further driving up maintenance costs, specifically so oil and gas companies can operate without federal oversight. Texas' lone power grid and the increased power of the oil and gas industry in the region has allowed for a volatile spot pricing scheme. The tradeoff for Texans is that the average electricity cost is 8.98 ¢/kWh which is 29% lower than the national average. This remains true until a surge of heat and accompanying electrical usage follows. Then Texans are faced with market prices surging to near $5000 per mega-watt hour and cleaning out their savings.
The trend will only grow more extreme as the effects of climate change metastasize. A 2021 study shows that Texas will experience double as many 100 degree days by 2036, 30 - 50% more urban flooding, and more intense droughts. Can the average Texan handle twice as many $5000 days? Or will this rapidly progressing trend leave thousands impoverished and destitute giving way to mass migration from the lone star state? Will the southern border move northward?
In 2021, the Texas power grid's knees buckled from a winter storm leading to a widespread energy infrastructure failure. Water and food shortages were widespread. More than 4.5 million homes had zero electricity during an ice storm in a state which has near zero experience with cold temperatures. An estimated 702 people died from this crisis. These deaths are directly attributable to these oil and gas companies. A report from U.S. federal regulators released ten years before this event warned these companies that infrastructure would fail if sufficiently cold weather arrived and an estimated $196 billion in damages would occur. These companies didn't create an exclusive power grid for nothing. They did it specifically to avoid federal oversight and they acted accordingly by ignoring any federal suggestions given to them to prioritize cutting costs and maximizing profits. Its a behavior, universal in all business, which has caused the climate crisis we are trapped in. Maybe companies shouldn't be trusted to regulate themselves at the cost of their own profit margins? Too late now.
Unfortunately for all Americans, this increasing trend of power grid failure can be extrapolated outwards. According to a Pentagon report issued by General Mark Milley, the U.S. national power grid is unprepared for meteorological stress. The power grid infrastructure was not built to withstand alternating conditions. Electricity generating power plants, electric transmission infrastructure, and distribution system components will be vulnerable to new weather patterns such as increased rainfall levels or extended periods of heat which can overwhelm the power grid. In 2019, a California utility power firm shut down power to over a million California citizens to avoid power lines sparking another wildfire during the dry season. From the 1950s - 1980s, the number of significant power outages was less than 5 per year. In 2007 there were 76. In 2011, there were more than 300.
The infrastructural and financial trends that climate change is bringing will drown families that are treading water financially. Without a federal investment in grid infrastructure coupled with power grid regulations, the already dire straits of inflation and high cost of living in the 20's will be remembered as pleasant memories.
